Crude Oil Below $90 By Economic Worries While Bouncing Back

Crude oil WTI is down by about 0.5% while bouncing back towards $91 from the lower value extreme of the month’s VWAP. The market was trading briefly below $90 in the European trading session.

The oil market is pressured by concerns of a global economic slowdown which may hurt energy demand and lead to tightening supply.

Central banks around the world are tightening their monetary policy and lifting interest rates higher to fight the inflationary rising prices which may lead to lower demand for a pressured oil price.

Additionally, Covid outbreaks in major Chinese cities of Shenzhen, Guangzhou, and Dalian placed millions under lockdowns and might result in slow economic activity in the second largest economy.

Clashes in Iraq did not affect the OPEC output for the moment while the New York trading session found some short covering. OPEC will meet in September for production policy while the Energy minister of Saudi Arabia mentioned that a revival of the Iran 2015 deal would lead to a production cut which eventually would be a bullish factor for the crude oil price.

The daily interval found some supportive core buyers around the Year’s lower value extreme, and raised the price back into the Quarter’s value area. The mentioned levels were confluent with the month’s lower standard deviation level of the VWAP which brought buyers and short covering into the market.

The short-term to median-term perspective may targeting rotations towards the upper value extreme of the Quarter’s view which stands around $100. The secondary target may lay around $112, depending on the auction around the mentioned Quarter’s DVAH and the Year’s VWAP.

The month fell by about 7.7% the third month in the row while the market found some core buyers around the Decade”s upper value extreme. Support is depending on the potential output cut which may lead to median-term long buyers.

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Japanese Yen Pressured By U.S Fed Tightening Approach

The Japanese yen increased its value against the dollar with about 0.4% in the early New York trading session. The rate found supportive yen buyers around the previous VWAP close level on the intraday interval.

The Yen got pressured by the recent hawkish comments by the Fed policymakers which want to keep raising interest rates until inflation gets under control to calm down the surging prices.

Bank of Japan Governor Haruhiko Kuroda’s speech at the Jackson Hole symposium indicated a continuation of the current ultra-supportive monetary policy as rising inflation in the country has been largely externally driven and prices might reverse towards 1.5% in the upcoming Quarters. BOJ board member Toyoaki Nakamura also stressed the need to maintain massive stimulus to support the Japanese economy.

The Japanese yen has been pressured for several months by the interest rate hike gap between the BoJ and the other global central banks which are raising and tightening monetary policy, strengthening the dollar favored side to fight the inflationary pressure in the other economies.

The daily interval found some resistance around the upper bracket extreme which found some yen buying and dollar shorting while the rate trades above the Quarter’s, Year’s and Decade’s VWAP value areas which might be bullish biased in favor of the dollar as path of least resistance by the mentioned Fed monetary approach.

The intraday perspective trades rotational in the week’s developing value and found potential dollar longs which drive the rate higher towards the week’s upper value extreme. Yen longs may emerge around the current VWAP close level or the mentioned upper DVAH level of the week. 

Yen buyers may emerger around the VWAP close level or upper DVAH level of the week.

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US Futures Gain While Twitter Shares Pressured: Market Update

U.S Futures rose with the E-mini S&P 500 up by about 0.7% and traded around 4047 in the European trading session. The market got balanced after the hawkish comments from the Fed Chair Jerome Powell which brought the Futures to tumble for around two days.

Banking, mega cap growth and technology stocks led while shares of Twitter fell after Elon Musk cited whistle-blower claims as a new reason to terminate the $44 billion takeover of the company.

Upcoming data includes the CB Consumer confidence and JOLTS due to release today. The VIX is around minus 3.2%, giving the market a slight bearish nuance. The yield and dollar index fell which may be supportive for the commodities while gold slipped about 0.4% and Crude oil dropped 2.4%.

Meanwhile, the economic sentiment indicator (ESI) in the Euro Area fell to 97.6 in August and Germany’s inflation rose to 7.9% vs 7.5% previously while the monthly data shows an easing towards 0.3% vs 0.9%.

The euro might be pressured by the data while the rate against the dollar is up by about 0.2%, testing the week’s upper value extreme for euro longs. In case of a drop the rate may find support around $0.9988 which is the week’s VWAP.

The CME:ES Futures contract trades above the week’s developing value area with a slight imbalanced slope to the bullish side. The prior VWAP close level around 4037 might be of support for buyers as well as the lower value extreme of the weekly perspective. Currently the Futures lurking for buyers around the week’s DVAH level.

The daily interval found buyers around the Quarter’s developing VWAP for potential bullish bias into the New York trading session while the prior swing highs served as absorption area for a reversal currently. 

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Crude Oil Pressured By Slow Demand And Supply Boosts

Crude oil fell by about 0.7% and trades around $89 while the market found supportive buyers around the lower extreme of the current balanced price range on the hourly interval. The price may target the swing highs for absorption purposes as the market is supported by the Year’s lower value extreme which is confluent with the decade’s upper standard deviation level. Slow demand and supply boosts pressured the oil price lower in the prior weeks. Meanwhile, the Iranian nuclear deal 2015 is about to revive which might boost the Iranian oil export with about 2.5 million bpd. Fears about an economic slowdown by the monetary tightening and interest rate hikes might be additional selling factors. Elsewhere, the Sichuan province keeps up with industrial power cuts because of the recent electricity shortage and the heat waves which are overheating the network in some regions of China. 

Money managers were increasing the net selling side with about 13,380 contracts with combined long liquidations and newly opened short positions on the Futures & Options market. Forecast of the developing price of the oil pointing to the upside for the moment, according to calculations and analyst estimates.

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Global Equities Pressured By Hawkish Perspective: Market Update

The global equities sector got under pressure as the E-mini S&P 500 fell by about 1.8%, Nasdaq dropped by 2.3% and the Dow Jones is 1.5% in the red as investors are concerned about the hawkish comments by Fed policymakers and worries about a recession. The likelihood of an interest rate hike of about 75bps in the next FOMC meeting might be higher now. High-performing technology stocks got under pressure with Microsoft, Amazon, Alphabet, Facebook, Tesla, and Apple as well. Traders seemingly looking forwards to the Fed Chair Jerome Powell’s speech at the central bank’s annual Jackson Hole economic symposium to conclude further scenarios on the U.S economic front.

However, the recent COT reports shows that Asset Managers and Institutional traders were short covering about 57.512 contracts of CME:ES Futures while new long positions of about 23.084 were opened. The total net positions increased to the buying side, giving the market a potential bullish touch for the upcoming week.

Net hold long postions rises while shorts decreasing

Looking at the current macro perspective on a monthly interval we can see sellers around the Year’s developing VWAP which are pressured with the mentioned economic concerns. The hourly interval heading lower towards the mean of the previous distribution or balanced price range which might serve as a supportive level for buyers, depending on the auction around it. Meanwhile, the dollar index surged about 0.6% with the yield up about 1.3%, hitting the 3% level by the hawkish perspective which may pressure the commodities sector such as Gold (-0.7%).

Mean of prior balanced price range might be supportive for buyers.

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Monetary Tightening Outlook Pressures Markets: Market’s Ahead Update

 The U.S output gap fell towards about minus 400, seemingly trending lower and pointing to a potential economic slowdown which may pressure the equities sector as the Nasdaq closed lower with about 1.9% and the Dow Jones Futures contract closed with minus 0.8% on Friday’s New York trading session. Additionally, the markets are pressured by the aggressive monetary tightening outlook as St. Louis Fed President Bullard said that he is leaning towards a third consecutive 75bps rate hike and several other policymakers signaled that a dovish perspective is unlikely for the moment. Technology and high-growth stocks were among the main losers of the session as $2 trillion dollars in options contracts were estimated to expire in the session, giving a bearish bias for the equites sector. 

Both indexes are up on this particular month while testing sellers around the Year’s developing VWAP. The hourly interval of the NASDAQ Futures contract might buy some buying around the current Quarter’s upper value extreme which is confluent with the Month’s developing VWAP while sellers may target the lower month’s DVAL level as next potential buying level. 

Forecasts for the Dow Jones index are pointing to the downside, according to the calculations and analyst estimates after the market found supportive core buyers around the lower standard deviation level of the decade’s price range. To be noted is that the Dow Jones Index may find supportive buyers around the month’s upper value area in the next week as the market took a hold around it on Friday’s closing hours.

In the upcoming week he US with Fed Chair Jerome Powell’s speech at the Jackson Hole will be monitored by investors as well as data such as personal income and spending, durable goods orders, new home sales and the second Q2 GDP estimate. PMIs for several nations will be released in the next week as well while monetary policy meetings in China, South Korea, and Indonesia will be followed. 

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Copper Price Rose By The Record Heat Waves

Copper closed with gains of 0.9% around $3.65 on Friday’s New York trading session. Investors were looking at China’s clouded economy and supply concerns. Recently reported heat waves caused power grids to overheat which led some regions to ration energy among factories, leading the price of the metal higher by about 2.5% in this particular month as industry researcher Shanghai Metals Market pointed to a 24% yearly decline in copper scrap production during July added to the price rise in this month. 

Copper's monthly interval seemingly found some support around the decade’s developing VWAP while the price traded below the particular level, testing potential selling pressure for the moment. The hourly interval might meet absorption behavior in the next week as the price trades above recent swing highs and prior VWAP close level might be an additional spot of resistance.

The managed money sector is quietly bearish oriented with about a -16,204 net position while short covering of about 3,878 contracts in the previous week increased the net hold position higher. Net positions are around the swing lows in the 5 Year’s range and might turn the table to the long side in the near-term perspective.

Current forecast and analyst estimates point to the downside, according to research reports and calculations while the market testing macro buyers around the lower standard deviation level of the decade’s price range. The ultra-macro view still has room to the downside as it is trading below the mean of the historical price range.  

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